scholarly journals Intra-Industry Trade with Bertrand and Cournot Oligopoly: The Role of Endogenous Horizontal Product Differentiation

2015 ◽  
Author(s):  
James Brander ◽  
Barbara Spencer
Keyword(s):  
Product Differentiation ◽  
Cournot Oligopoly ◽  
Industry Trade ◽  
Horizontal Product Differentiation

scholarly journals Codetermination, Price Competition and the Network Industry

2019 ◽  
Vol 20 (4) ◽  
pp. e795-e830
Author(s):  
Luciano Fanti ◽  
Luca Gori
Keyword(s):  
Nash Equilibrium ◽  
Product Differentiation ◽  
Price Competition ◽  
Complete Information ◽  
Bargaining Unit ◽  
Price Setting ◽  
Strategic Substitutes ◽  
Network Industry ◽  
Horizontal Product Differentiation

Abstract This research develops a tractable two-stage non-cooperative game with complete information describing the behaviour of price-setting firms that must choose to be profit maximisers or bargainers under codetermination in a network industry with horizontal product differentiation. The existing theoretical literature has already shown that codetermination might arise as the endogenous market outcome in a strategic competitive quantity-setting duopoly. In sharp contrast with this result, the present article shows that codetermination does never emerge as a Nash equilibrium in a price-setting non-network duopoly. Then, it aims at highlighting the role of network externalities in determining changes of paradigm of the game and letting codetermination become a sub-game perfect Nash equilibrium when prices are strategic substitutes or strategic complements. This equilibrium may be Pareto efficient. Results allow distinguishing between mandatory codetermination and voluntary codetermination. The article also proposes a model of endogenous codetermination according to which every firm may choose to bargain with its own corresponding union bargaining unit only whether the firm’s bargaining strength is exactly the profit-maximising one. The equilibrium outcomes emerging in this case range from a uniform Nash equilibrium, in which both firms are codetermined, to mixed Nash equilibria, in which only one of them chooses to be codetermined. These results are ‘network depending’ and do not hold in a non-network duopoly.

Innovation in the Seed Market: The Role of IPRs and Commercialization Rules

2016 ◽  
Vol 14 (1) ◽  
Author(s):  
Marc Baudry ◽  
Adrien Hervouet
Keyword(s):  
Product Differentiation ◽  
Economic Consequences ◽  
Vertical Product Differentiation ◽  
Legal Rules ◽  
Sequential Innovation ◽  
Seed Market ◽  
Second Category ◽  
The Impact ◽  
Compulsory Registration

AbstractThis article deals with the impact of legal rules on incentives in the seeds sector to create new plant varieties. The first category of rules consists in intellectual property rights and is intended to address a problem of sequential innovation and R&D effort. The second category concerns commercial rules that are intended to correct a problem of adverse selection. We propose a dynamic model of market equilibrium with vertical product differentiation that enables us to take into account the economic consequences of imposing either Plant Breeders’ Rights (PBRs) or patents as IPRs and either compulsory registration in a catalog or minimum standards as commercialization rules. The main result is that the combination of catalog registration and PBRs adopted in Europe is hardly supported by the model calibrated on data for wheat in France.

Gli standard privati di sicurezza alimentare: un modello di teoria dei contratti per l'analisi degli aspetti organizzativi e promozionali

2012 ◽  
pp. 85-105
Author(s):  
Antonella Di Fonzo ◽  
Maria Angela Perito ◽  
Carlo Russo
Keyword(s):  
Theoretical Model ◽  
Food Safety ◽  
Product Differentiation ◽  
Diversification Strategy ◽  
Private Standards ◽  
Food Distributors ◽  
Definition Of ◽  
Large Distribution ◽  
Current Behavior

In recent years, large food distributors poured considerable effort in the definition of private standards of food safety for their products. Despite these efforts, medium and large retailers have yet to begin advertising to their consumers the adoption of such standards and, in doing so, do not actively pursue a diversification strategy for their products. This behavior seems paradoxical as large retailers would benefit from product differentiation. This article focuses on the role of standards in the coordination of the supply channels and proposes a theoretical model that gives an economic motivation to the current behavior of large retailers. The first objective of this study is to demonstrate how the adoption of standards is a rational choice for large retailers, even in the case in which consumers are not willing to pay for food safety. The reason is that standards can also be used to solve information asymmetry problems and organize the supply chain. Secondly, the theoretical model of contracts suggests that, investments related to the promotion of standards to the consumers, might, under certain conditions, undermine the profits of the large distribution.

scholarly journals Determinantes de la adopción de estándares en el subsector hortícola del Noroeste de México.

2011 ◽  
Vol 12 (2) ◽  
pp. 175 ◽  
Author(s):  
Antonio Martínez R. ◽  
Belem Avendaño R. ◽  
Ana Acosta M.
Keyword(s):  
Product Differentiation ◽  
Production Systems ◽  
Agricultural Practices ◽  
Vegetable Production ◽  
Competitive Advantages ◽  
Natural Factors ◽  
Northwestern Region ◽  
Northwestern Mexico ◽  
Northwest Region

<p>La producción de hortalizas en la región Noroeste de México es una actividad económica relevante, lo cual se atribuye a factores naturales como el clima, calidad de los suelos y la cercanía al mercado de Estados Unidos de Norteamérica. Es evidente la creación de ventajas competitivas mediante la diferenciación del producto, por su calidad, a través de la aplicación de normas. La adopción de estándares es una práctica generalizada, sin embargo no está cuantificado el rol de las instituciones en estos procesos y su contribución a aumentar o inhibir los niveles de adopción de los mismos. El objetivo de este trabajo es analizar los factores que mas influyen en la implementación de grados y estándares en el sector hortícola en la región noroeste de México. Para la medición de la adopción se utilizó un modelo logit que permite determinar el efecto de las variables del entorno microeconómico que incide en la adopción de estándares. Se concluye que los cambios en los sistemas de producción mediante la aplicación de buenas prácticas agrícolas y las organizaciones de productores con actividades de capacitación, seguimiento y acompañamiento son lo que han contribuido en mayor forma al proceso de adopción de estándares por parte de las empresas productoras de hortalizas.</p><p> </p><p><strong>Determinants of the adoption of standards in the horticulture subsector of Northwestern Mexico.</strong></p><p>Vegetable production in the northwestern region of Mexico is an important economic activity; this is attributed to natural factors such as climate, soil quality, and proximity to the U.S. market. Clearly, the creation of competitive advantages gained by product differentiation, while maintaining quality, is extremely important and can be achieved through the application of standards. The adoption of standards is widespread; however, the role of institutions in these processes and their contribution to enhancing or inhibiting levels of implementation has not yet been quantified. The aim of this paper is to analyze the factors that most influence the execution of grades and standards in the horticultural industry in the northwest region of Mexico. Implementation levels were measured using a logit model that determined the effect of microenvironmental variables on them. The paper concludes that changes in production systems through the application of good agricultural practices and changes in organizations through training, monitoring, and support are what have helped companies that produce vegetables adopt and implement more standards.</p>

scholarly journals A Cross-Section Analysis of Intra-Industry Trade in the U.S. Processed Food and Beverage Sectors

1993 ◽  
Vol 22 (2) ◽  
pp. 189-198 ◽  
Author(s):  
Darcy A. Hartman ◽  
Dennis R. Henderson ◽  
Ian M. Sheldon
Keyword(s):  
Product Differentiation ◽  
Imperfect Competition ◽  
Economies Of Scale ◽  
Economies Of Scope ◽  
Processed Food ◽  
Industry Trade ◽  
Manufacturing Sectors ◽  
Food And Beverage ◽  
Trade Partners ◽  
Section Analysis

This paper analyzes the determinants of variation across industries in levels of intra-industry trade (IIT) for a sample of thirty-six U.S. processed food and beverage industries in 1987, previous studies of intra-industry trade having focussed on industry characteristics in the manufacturing sectors. The determinants predicted by IIT theory are measures of product differentiation, economies of scale, and imperfect competition; the results of this analysis indicate that IIT variation across the food and beverage industries is positively related to product differentiation, economies of scope, and similarity of tariff barriers among trade partners, but negatively related to industry concentration.

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